Bank of America to scrap overdraft fees for customers

BANK OF AMERICA said yesterday it will no longer charge overdraft fees on debit card purchases as of this summer, a move that may cost millions in fee income.

The change will eliminate one of the most common overdraft charges for Bank of America customers.

More than 60 per cent of all overdraft fees charged by the bank are for debit card transactions, company spokeswoman Anne Pace said.

The move is the second major change in the largest US bank’s overdraft policies, and will affect the largest debit card network in the country. The first change, in September 2009, curbed the number and amount of overdraft charges customers could receive in a given day.

Under the latest move, customers will simply be declined if they try to make purchases with debit cards without having adequate funds in their checking accounts.

The bank, led by chief executive, Brian Moynihan, said the move comes after customer consultation with consumer advocates. Customers said they would prefer to have a transaction declined, than have the bank allow them to spend money they did not have, the bank said.